Here's how GM is leading the way as auto giants prep for a revolution

Thursday

May 2, 2019 at 6:04 PM

DETROIT _ Can automakers walk and chew gum at the same time?

That's the challenge facing the world's giants, from General Motors and Ford to Volkswagen, Toyota and Hyundai.

How do they invest billions of dollars and countless hours of engineering and design talent in electric and self-driving vehicles they won't sell in meaningful numbers for years and simultaneously develop world-class cars and trucks customers will want until the mobility revolution comes, if it ever does?

GM may be showing the way, as it moves toward the goal of having electric-powered autonomous vehicles in commercial service somewhere in the United States this year and selling a wide range of EVs around the world in the near future.

GM's approach:

_ Pay less attention to vehicles people don't care about _ the automaking equivalent of Elmore Leonard's famous instruction to writers: "Try to leave out the part that readers tend to skip." Ceasing to build slow-selling, low-profit vehicles like the Chevy Cruze and Impala frees resources for other things.

_ Split product development into two channels: one focused on vehicles that will be built in high numbers for the next few years, the other on vehicles and technologies that will hit their stride later

_ Eliminate the longstanding engine and transmission development group and make its responsibilities part of vehicle engineering, a change that looks minor from the outside, but constituted a seismic shift within GM.

"Things happen when you focus on them," said Pam Fletcher, who led the program that created the Chevy Bolt electric car and Cadillac Super Cruise semi-autonomous driving system before assuming the new title of vice president for global innovation a few months ago.

"Our absolute intention is to commercialize these things. It's not invention for invention's sake. We've only been public about a fraction of what we're doing."

At the same time, human-driven cars powered by internal combustion engines accounted for 95 percent of the 8.4 million vehicles GM sold around the world last year. They pay the bills. GM can't take its eye off them as it looks to the future.

"If you don't shoot for the best, you fall behind very quickly" in hyper-competitive segments like SUVs and pickups, said Ken Morris, vice president of GM's global product group. "We need to make money on conventional vehicles and that means we need to be a leader. That's not going to change."

Combining time and talent

Moving engine and transmission development _ Global Powertrain Operations in GM Speak _ 20 miles from an engineering campus in Pontiac to GM's main tech center in Warren, may look like rearranging the deck chairs, but it eliminated bureaucracy and duplication of efforts that cost time and talent, Morris said.

Combine that with the work saved by dropping slow-selling vehicles and GM can tackle new challenges like batteries, electric motors and self-driving cars. Linking software development more closely to vehicle engineering removed more bottlenecks.

While electric and autonomous vehicles are profoundly different from today's vehicles, they share many parts and systems, Fletcher points out.

They'll "still be putting four wheels and tires on every car. Areas like chassis engineering have teams that work across the organization and portfolio. We share systems across platforms," Fletcher said.

Ford recently made similar changes. Joe Hinrichs leads Ford's global product development and manufacturing. Jim Farley oversees advanced technology, including autonomous vehicles. Ford's ambitious project to create an EV and AV center in Detroit's Corktown neighborhood is also part of the company's approach

"The reorganizations recognize how the market has the potential to change," IHS Markit senior analyst Stephanie Brinley said. "It's a difficult path to walk, but one automakers must follow."

A wait and see approach until customers demand EVs and AVs won't do, she said. No automaker can afford to be last into the new vehicle types, but nor can any afford to ignore what buyers want today.

That dovetails with GM's plan.

"We have a large portfolio and a large customer base," Fletcher said. "We're going to build a lot of kinds of vehicles for a long time."

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